Chugai Pharmaceutical Co Ltd v UCB Pharma SA

A contractual claim concerning royalties may require an English court to determine the scope of a foreign patent without becoming a direct challenge to its validity. Validity may be considered hypothetically and incidentally as an aid to construction, where the claimant does not seek revocation or a declaration of invalidity. An exclusive jurisdiction clause in a patent licence may allocate disputes about patent scope to the English courts while reserving validity questions to the courts of the state of protection. Giving effect to that bargain is not contrary to comity. The rule in Moçambique and the foreign act of state doctrine do not bar such adjudication.

Chugai sought declarations that its tocilizumab products did not fall within the scope of claims of a US patent licensed by UCB and that no royalties were payable. UCB applied to strike out parts of Chugai’s pleading or obtain summary judgment, arguing that the pleading raised the validity of a foreign patent and was non-justiciable.

The Licence provided for English law and the exclusive jurisdiction of the English courts. It defined a valid claim by reference to a final decision of a court having jurisdiction over the patent. The central issue was whether Chugai’s reliance on the hypothetical validity consequences of UCB’s proposed construction amounted to a direct challenge to validity.

1. Applications dismissed. UCB’s applications to strike out the disputed paragraphs and for summary judgment were dismissed. The English court had jurisdiction over the issues raised.
2. The substance of Chugai’s claim concerned the scope of the claims of the US patent and the resulting royalty obligations. Chugai did not contend that the patent was invalid and sought no relief concerning invalidity. Its reliance on the possible validity consequences of UCB’s construction was incidental and supported its proposed construction. The court therefore rejected the submission that the pleading was an impermissible validity challenge.
3. The Licence’s exclusive jurisdiction clause was construed broadly. It covered disputes under or connected with the Licence, including disputes about the scope of licensed patents. The definition of “Valid Claim” reserved revocation or equivalent invalidity claims to the courts of the state of protection, but did not reserve scope disputes. Celltech v Medimmune supported the same division between scope and validity.
4. The rule in Moçambique did not apply. The claim was contractual, the validity issue arose only incidentally, and the parties had agreed that the English courts should determine patent scope. Giving effect to that agreement was not an affront to comity. Lucasfilm Ltd v Ainsworth confirmed the attenuated scope of the rule and the modern approach to foreign intellectual property rights.
5. The foreign act of state doctrine also presented no impediment. The grant of a patent was not an act of state of the kind protected by the doctrine, and the doctrine did not prevent adjudication of foreign intellectual property infringement or scope even where validity might incidentally arise. The judge expressed a provisional view, unnecessary to the result, that a direct challenge to the validity of a foreign patent might be non-justiciable absent agreement.